Spark Finance has announced plans to fully deprecate its SparkLend lending deployment on Gnosis Chain by September 14, 2026. Once a Sky governance spell executes, any outstanding loans on the network will become eligible for liquidation.
Timeline and Wind-Down Steps
SparkLend originally launched on Gnosis Chain in September 2023 as the protocol's first expansion beyond Ethereum. The wind-down process began in early 2026 when Spark froze new deposits and borrows on the Gnosis instance to limit further capital exposure. Additionally, the protocol raised the reserve factor to 50% across all assets on the deployment to accelerate the drawdown of outstanding positions.
The affected assets include WXDAI, sDAI, WETH, wstETH, EURe, USDT, USDC.e, GNO, and USDC. Spark has advised users to repay their debts and withdraw their collateral before the final governance spell executes to avoid forced liquidations and associated penalties.
Reasons for the Shutdown
The decision to shut down the Gnosis deployment stems from low utilization and lending volume. The network failed to generate sufficient interest revenue to make the deployment economically self-sustaining for Spark. Maintaining a separate deployment, managing risk parameters, and monitoring positions resulted in a negative return on resources, with the Gnosis deployment contributing negligible revenue compared to its Ethereum counterpart.
This shutdown follows a pattern established earlier in 2026, when Spark took similar risk-reduction steps against underperforming Ethereum-based assets. Spark has noted that the protocol could potentially return to Gnosis if market conditions improve materially in the future.
